Blog #2 - Identifying the Right Capabilities

The Coherence Premium article talks about the importance of identifying internal organizational capabilities before identifying a possible value proposition in the market. Even though the article focuses on established companies identifying their strengths or unique aspects and harnessing this for new products or ventures, this principle can also be applied to new companies that are trying to identify their unique selling point(USP), and how this USP fits into the market dynamic.

Let’s look at Swiggy, which is one of the leading food delivery services in India valued at around 4 billion dollars. When Swiggy was founded in 2015, the food delivery market in India already had established players like Zomato and FoodPanda. For any mobile-application-based company, an intuitive factor that draws customers is the user experience of the application. How good does the app look? How easy is it to order food? And Zomato and FoodPanda had embraced these ideals when constructing their business model. So, both these companies despite having food delivery services, did not focus on the logistics aspect of the business.

            Despite being late to the market, Swiggy set its initial goals towards establishing a solid logistics operation that would enable them to perform seamless deliveries in multiple cities in India. Another key aspect to note here is that, as a food delivery company, Swiggy is a service rather than a company that makes products. For any company providing a service, the biggest factor in acquiring and retaining customers is the customer experience and support that is provided. Combining these two factors leads to a flexible delivery team that provides prompt customer support.

I had an interesting personal experience with one of my Swiggy orders, which I’d like to share even though one person’s experience may be insignificant in the scope of this article. How many times have you ordered food, paying for it and then later getting an update that one of the items wasn’t available? This is one of the most frustrating things that can happen to a customer ordering food and even though most deliveries companies say that someone will contact you in such scenarios to resolve the issue, it often doesn’t happen. One time I ordered food from a quaint North Indian store through Swiggy and it turned out that one of the items wasn’t available. I was notified of this not through an update or a message, but through a phone call. The support person contacted me, informed me of the issue and connected me to the restaurant. Now, India has a lot of languages and the person at the restaurant was unable to converse in English or Tamil which is the prevalent language in my city. The support personnel spoke to the restaurant guy, translated what I was saying and helped me edit my order based on what was available. Now, this may be a small gesture, but this is how you gain the trust and support of customers.

Throughout its growth, Swiggy has embraced mechanisms that enable customers to be more flexible with their food order experiences. Customers can make an order of small value and this does not result in a huge delivery fee. Digital payment methods like Paytm provide a lot of convenience while also, cash on delivery, which involves paying for your order after you get it, is extremely useful since India hasn’t fully adopted the digital payment systems. Partnering with payment options like Paytm, provides Swiggy with an opportunity to run promotions linked to certain payment methods while obtaining a commission from such partner companies. The same principle applies to advertising and featuring restaurants which is important for obtaining more revenue, since Swiggy technically does not have a product to sell and make money.

All these factors have resulted in Swiggy constructing a sustainable business model, while simultaneously growing and expanding to include multiple cities and restaurants in India supported by a huge network of delivery personnel. Identifying the right capabilities and mapping them to the industry is the key reason why Swiggy has been able to succeed despite being late to the party in a competitive industry in India.